Don’t take govt bul­ly­ing

The Witness - - OPINION -

THROUGH both ap­a­thy and fear, South Africa’s busi­ness­peo­ple have al­lowed lo­cal law mak­ing to be­come hope­lessly in­con­sis­tent with the doc­trine of the rule of law, a prin­ci­ple that un­der­pins our en­tire Con­sti­tu­tion.

The rule of law re­quires a gov­ern­ment that is pre­dictable, con­sis­tent, op­er­ates ac­cord­ing to strict and known cri­te­ria and, most im­por­tant of all, is not able to act ar­bi­trar­ily or at the per­sonal whim of one or more of­fi­cials.

The rule of law is not the “good” or “ef­fec­tive” en­force­ment of the law, it is a sep­a­rate le­gal doc­trine that in­forms our en­tire body of law.

When we op­er­ate from the firm un­der­stand­ing that South Africa must be gov­erned by pre­dictable, known and non­ar­bi­trary de­ci­sions, then it fol­lows that those who are af­fected by gov­ern­ment de­ci­sions should feel com­fort­able when speak­ing out against a gov­ern­ment that does not live up to this stan­dard. All cit­i­zens, as well as en­trepreneurs and providers of goods and ser­vices, must have the free­dom to op­pose gov­ern­ment openly, es­pe­cially capri­cious of­fi­cials, with­out fear of ret­ri­bu­tion.

In the­ory we have this right. How­ever, in prac­tice this is of­ten not the case, es­pe­cially in in­dus­tries where the heavy hand of gov­ern­ment is felt ev­ery day. It all boils down to a com­bi­na­tion of the gov­ern­ment’s ut­ter dis­re­gard for the rule of law, to bul­ly­ing reg­u­la­tors and to busi­ness fear and ap­a­thy.

The fi­nan­cial ser­vices in­dus­try im­me­di­ately comes to my mind, where two decades of end­less reg­u­la­tory “re­form” has her­alded a “state within the state” in which pub­lic ser­vants have their own quasi law­mak­ing bod­ies, along with their own tri­bunals that ad­ju­di­cate dis­putes and keep and spend the fines that they levy.

The min­ing in­dus­try is an­other that is sim­i­larly plagued and en­tirely de­pen­dent upon the grace and favour of its reg­u­la­tory over­lords to grant li­cences and per­mits, vir­tu­ally at their whim.

Bu­reau­cratic empires with their own system of law mak­ing and where each in­dus­try seg­ment is run much like a per­sonal fief­dom, have no place in a con­sti­tu­tional South Africa.

The bul­ly­ing is not al­ways overt, of course. More of­ten than not it is sim­ply the fear of be­ing bul­lied or dealt with un­fairly or ar­bi­trar­ily by bu­reau­crats that makes com­pa­nies keep quiet.

Th­ese com­pa­nies may well have noth­ing to hide but vin­dic­tive gov­ern­ment in­ves­ti­ga­tions, clo­sures or sus­pen­sions can take up a great deal of ex­ec­u­tive time and quickly run into mil­lions of lost rands, both for the com­pany and the fis­cus.

Last year, the Labour Court set aside a de­ci­sion by the Mine Health and Safety In­spec­torate that brought all op­er­a­tions at a listed gold mine to a stand­still, cost­ing the com­pany and the coun­try many mil­lions in lost pro­duc­tiv­ity. While this was more a case of bad judg­ment than one of bul­ly­ing, min­ing houses would clearly rather pros­trate them­selves in supine obei­sance than risk up­set­ting th­ese salaried wards of the state and have some­thing sim­i­lar hap­pen again.

The Labour Court found that the in­spec­torate acted ir­ra­tionally but the in­spec­torate nonethe­less re­tains th­ese dic­ta­to­rial pow­ers due to our par­lia­men­tar­i­ans hav­ing for­got­ten the rule of law pro­vi­sions of our Con­sti­tu­tion.

In­deed, the fact that our laws even re­motely al­low of­fi­cial­dom to act vir­tu­ally un­fet­tered is an in­sult to South Africa’s le­gal or­der.

To add in­sult to in­jury, th­ese gov­ern­ment de­part­ments have an end­less sup­ply of money to fund the le­gal bat­tles that are (all too rarely) launched against them by firms that are fed up with what they con­sider un­bear­able, gov­ern­mentcre­ated anti­growth con­di­tions.

Whereas com­pa­nies rely on funds earned by serv­ing the mar­ket, th­ese bu­reau­cratic fief­doms are able to launch vir­tu­ally end­less chal­lenges us­ing the bot­tom­less pit of tax­payer money. Af­ter years of lit­i­ga­tion, many firms sim­ply give up and go where they are wel­comed and where the rule of law ap­plies.

South Africa can no longer af­ford a men­tal­ity of ap­a­thy and fear, a men­tal­ity that was aban­doned dur­ing the later years of apartheid and re­sulted in our win­ning a con­sti­tu­tional democ­racy. It can and must be won again as we reteach our politi­cians the mean­ing of the rule of law. — FMF. • Martin van Staden is le­gal re­searcher at the Free Mar­ket Foun­da­tion and aca­demic pro­grammes di­rec­tor of Stu­dents For Lib­erty in south­ern Africa.

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